Home Tax informationGlobal sales: what you need to know about Hotmart's business model updates

Find your question in the Help Center

Global sales: what you need to know about Hotmart's business model updates

Starting on 1 January 2024, Hotmart will act as an agent for creators, representing them to buyers, cocreators and affiliates. This change is the result of updates to Hotmart's business model that will initially apply to sales made to buyers in Colombia, regardless of the creator's location.

 What do these updates mean to me?

These updates will give you more autonomy and flexibility in developing your business strategies, increasing your decision-making power and potentially bringing more benefits, such as

  • Tax management: Manage the tax aspects of your business to better control your sales and cash flow and potentially grow your business;
  • Product classification: Determine the nature of your product (e.g., educational products, live interaction, etc.) to potentially benefit from tax regimes and exemptions that may be applicable to some creators, companies and/or products.

With the updates to the business model, you'll be responsible for determining the taxes on sales made in Colombia. 

As a creator, you'll have a direct relationship with your buyers and will be responsible for tax assessment and calculation (knowing if and how much tax to pay), tax collection, remittance (tax payment), and invoicing for each sale made in Colombia.

As a cocreator or affiliate, you'll have a direct relationship with the creator you work with and continue to be responsible for any taxes that may apply to you and your services.

We have compiled a list of frequently asked questions regarding our business model and categorized them for easy navigation. To access the information you need, simply click on the question, and the corresponding answer will be displayed:

 

Questions related to business model updates and first steps

What are the benefits of updating the business model?

Updating the business model can provide creators the autonomy and flexibility to develop business strategies, enhancing their decision-making ability. Additionally, it can improve control over sales, cash flow management, and determination of the nature of the product, which can potentially result in tax deductions and exemptions.

 

What are my responsibilities in this new business model?
Creators are responsible for calculating, reporting, and paying taxes, as well as invoicing each sale. Cocreators and affiliates have tax responsibilities related to the services provided and are also responsible for issuing invoices to the creators they work with.

 

Who will be affected by the business model changes?
These changes will initially apply to sales made in Colombia, regardless of where the creators are located. This model update will include all countries that Hotmart sells to by 2024.

 

Is it possible to keep using the current business model?
This change will be global and will apply to all Hotmart users. It will not be possible to maintain the current model, as all Hotmart users will need to adjust to the business model already used for sales in Brazil.

 

How should I prepare for the upcoming business model updates on January 1, 2024?

Creators, cocreators, and affiliates are advised to consult with their accountants and lawyers to understand their accounting and tax obligations in each country where they provide services and sell products, including Colombia. 

To prepare, it is important to know the location of your buyers and, with the help of an accounting expert, determine the countries where your products will be subject to taxes and the corresponding tax obligations that arise from these sales.

 

Will these changes impact sales made in Brazil?
Sales made by creators in Brazil, in Brazilian Reais, will continue as usual, as these transactions already have Hotmart in an agent role. However, please note that if the creator lives in Brazil but the buyer resides in a country other than Brazil, the sale will be considered international and will therefore be subject to the changes mentioned. For more information on applicable taxes in Brazil, click here (available in Portuguese).

 

Is it necessary to register a company in Colombia to sell products there?

Not necessarily. Selling to customers in Colombia does not necessarily require setting up a company, but there may be applicable taxes, such as VAT on digital products.

It is important to understand the tax implications of selling digital products and to check whether the product you sell is taxable in the buyer's country. We recommend consulting an expert on this matter. In addition to compliance obligations, there may be exemptions applicable to your case.

 

Are there accountants or tax advisors with sales expertise in Colombia that I can consult?
Hotmart PRO (BETA) is a marketplace where creators can hire specialists in Paid Traffic, Product Launches, Copywriting, Design, Sales Recovery, and Accounting to help manage and grow their digital business. Currently, Hotmart PRO is only available to creators in Brazil.

 

How can I find out more about the changes to Hotmart's business model?
We are working on creating content and solutions to help you adapt to the updates during November and December. We will also be partnering with experts to provide additional support. More details on this subject will be shared soon, so you can make the adjustments to your business smoothly. Additionally, it is essential to review Hotmart’s General Terms of Use and General Payment Policy, which will be updated soon to reflect these changes.

 

How will this impact contracts that are currently in force?
The Terms of Use and Policies of the platform will be updated to reflect the change in business model. However, any specific terms agreed upon in partnership contracts will remain unchanged.

 

 

Questions related to applicable taxes

How can Hotmart’s business model updates impact me tax-wise?

The business model for global sales is being updated to align with the Brazilian scenario. This means that creators, cocreators, and affiliates must report the amounts due to the IRS to avoid discrepancies in values. 

The same process applies in Colombia. Failure to pay or declare taxes correctly may result in notification from the Colombian tax authorities. As a creator, you have the freedom to define and implement your tax strategy.

 

Is it necessary to seek tax advice to deal with these changes?
We strongly recommend seeking tax advice to fully understand how to proceed with these updates to our business model, analyzing their impact on your context, and tailoring them to your specific needs. Please note that you are responsible for the tax aspects of your business, and you must ensure that all processes, including the issuing of invoices, comply with legal and tax regulations.

 

Will Hotmart provide tax consultant support for its users?
The Hotmart platform hosts products and facilitates sales. It is not responsible for providing tax advice to users.

 

Which invoices will Hotmart issue for creators, affiliates, and cocreators?
Hotmart will only issue invoices for the fees related to platform services provided. To access these invoices, refer to the article on How to issue an Invoice report.

 

Will taxes be applied for each sale, regardless of whether the amounts are transferred to Colombia or not?
Sales of digital products are generally subject to VAT based on the buyer's country, regardless of the creator's location. In Colombia, there are some exemptions for educational and certain types of digital products. We recommend consulting your accountant to confirm whether these exemptions apply to your product. Any questions regarding other taxes, such as income tax, should also be directed to your accountant.

 

What are the applicable taxes by country, and how should I file my tax return, considering the updated business model?
For questions like these, we recommend that you consult with your accountant or lawyer for advice and assistance with your strategy.

 

How does this change affect taxes for individuals starting a business in the USA?
There are no specific impacts for creators in any particular country. It is essential to understand the tax regulations for digital products, particularly in the markets where you sell.

 

Which tax structure best suits the updated business model?

We recommend you seek advice and assistance from your accountant or lawyer to develop your strategy.

 

As a creator, am I required to pay taxes related to my affiliates?
Hotmart recommends seeking support and guidance from tax advisors or accountants regarding payment to affiliates and the taxes involved in this relationship.

 

Is it possible to download the invoices related to payments made to my affiliates for reporting purposes?

A new column has been added to the sales report for invoices. To download it, go to Reports > Sales Reports.

Creators and their accountants should confirm the details of the amount to be declared.

 

What amount should I use in my invoice for a product priced at US$ 1000 + VAT?
Creators, with the support of an accountant, must define the optimal pricing strategy, considering their responsibility for tax collection and payment. Invoices can be issued and sent through our native integrations or in any manner preferred by the creator.

 

 

Questions related to invoicing for sales made in Colombia

If I make a sale to a buyer in Colombia, am I obligated to issue a Colombian invoice even if my company is not located there?
The obligation to issue an invoice following Colombian rules is determined by the Colombian Tax Law and depends on various factors, including your location and the product you sell. We recommend consulting a tax expert to understand the obligations related to selling in Colombia.

 

Do companies located outside of Colombia need to issue invoices or electronic invoices for sales made within the country?

According to the tax legislation in force in Colombia as of December 11, 2023, sales transactions made by non-residents of Colombia to buyers located in Colombia are not subject to the issuance of e-invoices in Colombia. However, it is essential to confirm with your tax or accounting advisors the type of tax document that should be issued in this situation.

In general, it is necessary to issue a document, such as an invoice, to support the transaction. The document should contain relevant information, such as the value of the operation, date, description of the product or service sold, name and address of the seller, and name and address of the buyer.

 

What platforms are available for issuing invoices for sales made in Colombia?

Hotmart offers native integrations with Alegra, a Colombian platform that specializes in invoicing and accounting, and eNotas, which serves Colombia and Brazil. Additionally, you can use the sales reports available on the platform to integrate with other tools via API

For more information on available options for issuing invoices, please refer to the article Accounting & Tax Solutions.

 

How will currency conversion be carried out for invoices in Colombian Pesos?
Hotmart provides sales data based on the currency used in the transaction, but does not offer currency conversion. When issuing the invoice, creators will be able to view both the original value and the converted value.

 

 

Questions related to sales, withdrawals and commissions

Is it possible to restrict sales to Colombia?
No, there is no feature to block sales by country.

 

How should I adjust my product pricing to account for applicable taxes in Colombia?
Creators are responsible for developing the optimal pricing strategy, considering that they are now responsible for collecting and paying taxes on sales made in Colombia, if the product is taxable in that country.

 

For creators outside of Colombia, will the 19% VAT for sales in Colombia be applied automatically at checkout, or is it the creator's responsibility to activate it on the platform?
With the business model updates, it will be the responsibility of creators, cocreators, and affiliates to calculate, file, and pay the taxes. There is no feature to ‘activate’ tax collection at checkout. Creators should consult their accountants and lawyers to determine the best strategy for their business.

 

Will there be any impact on chargeback and refund processes? Can I refuse refund requests during the guarantee period?
No, the processes remain unchanged.

 

Will commissions for cocreators remain the same?
Yes, commissions for cocreators will remain unchanged and will continue to be based on the percentages defined by the creator.

 

Will the changes to Hotmart's business model affect commission payouts?
Starting in January, commissions from international sales or sales in currencies other than BRL will be automatically transferred to your registered bank account on our platform without any withdrawal fees. Please note that the process for receiving commissions for sales made in Brazil, in Brazilian Reais, remains unchanged. For further information, please refer to this article.

 

Do you need to talk to us?

If you have any further questions, please contact us and we'll get back to you as soon as possible